Research Paper IJMSRR Impact Factor 0.348 E- ISSN - 2349-6746 ISSN -2349-6738

COMPARATIVE OPERATIONAL EFFICIENCY OF PRIVATE AIRLINES IN INDIA

Dr. A. Muthusamy Associate Professor, Dept. of International Business and Commerce, Alagappa University, Tamilnadu, India.

INTRODUCTION The aviation sector has become the most important segment in the economic development of a nation. It plays a vital role in moving people or products from one place to another, be it domestic or international, especially when the distances involved are far. Stiff competition and favorable initiatives of the Government of India added fuel to enlarge both flights and fleets. Now ordinary citizens easily access the aviation service from their respective air terminals. In a highly competitive environment the provision of high quality services to passengers is the core competitive advantage for an airline's profitability and sustained growth. In the past decade, as the air transportation market has become even more challenging, many airlines have turned to focus on airline service quality to increase service satisfaction. The aviation industry in India has gone through yet another very difficult year of operations due to high operating costs and slump in demand, resulting into industry showing substantial losses for Fiscal 2013. Crude oil prices continued to be very high and airlines were not able to pass on full impact of increase to the passengers. In addition, depreciation of Indian rupee against US Dollar had put significant pressure on the cost line of the airlines.

IMPORTANCE OF THE STUDY The Indian civil Aviation industry has helped in the growth of the Indian economy. The private Airlines have also contributed to the industry of Air Transportation. The private Airlines have played a major role in this mass cargo transportation of food grains and other things in Import and Export. The private Airlines consist of both major Air Transport of Passenger on one hand and also relatively load on the Goods of cargo on the other. They are not only play an important role in Air Transportation of private Airlines and cargo but also contribute substantial value addition in term of service quality, passenger satisfaction, Innovation and cost effectiveness of the Private Airlines in India. In this paper, an attempt to analysis comparative operational efficiency of Selected Private Airlines in India.

METHODOLOGY The study is empirical in nature and executed using the data published by . The research study is based on secondary data. The financial data related to the selected Private Airlines were collected from website and Annual reports of selected Private Airlines.

PERIOD OF THE STUDY The present study covers a period of five years taking from March 2009 to March 2013.

SAMPLING DESIGN The sample Private Airlines are selected on the basis of convenient sampling method .A sample of four Private Airlines has been selected on the basis of availability of data and also these four Private Airlines are the main largest Air Transport in the private Airlines. The following Private Airlines have been selected for the study i. ii. Spice Jet iii. iv. Jagson Airlines

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INCOME AND EXPENSES OF JET AIRWAYS, SPICE JET, KINGFISHER AIRLINES AND JAGSON AIRLINES The following table highlights the income and expenses earned during the study period. t –Test for Jet Airways, Spice Jet, Kingfisher airlines and Jagson Airlines Limited.

Null Hypothesis: There is no significant relationship between Income and Expenses of Jet Airways, Spice Jet, Kingfisher airlines and Jagson Airlines The following table.1 gives the particulars of Income and Expenses of sample airlines during the period of 2008- 2009 to 2012-2013.

Table 1, Income and Expenses of Jet Airways, Spice Jet, Kingfisher Airlines and Jagson Airlines (Rs.In crores) Jet Airways Spice Jet Kingfisher airlines Jagson Airlines Year Income Expenses Income Expenses Income Expenses Income Expenses 2008-09 12014.90 10969.32 1438.58 5822.37 5868.07 679.13 7.55 7.89 2009- 10 10688.39 8329.85 1786.48 4747.51 4734.62 1498.84 11.69 13.10 2010-11 13033.09 10267.73 2242.09 5289.34 6314.96 670.30 10.79 13.65 2011-12 15477.39 13369.66 2950.83 7651.81 5823.91 5 17.66 13.12 2012- 13 17509.71 15946.66 4019.11 3309.65 683.46 0.05 0.49 1.35 Mean 13744.70 11776.64 2487.42 5364.13 4685 4 9.64 9.82 SD 2739.40 2946.85 1026.21 1585.10 2311.29 1.013 6.28 5.29

T-Test Paired Two Samples for Mean Income and Expenses of Airways Limited

Jet Airways Spice Jet Kingfisher airlines Jagson Airlines Mean 1968.05 460.77 679.13 0.19 SD 675.03 775.45 1498.84 2.81 Std Error Mean 301.88 346.79 670.30 1.25 Observation 5 5 5 5 Hypothesized 0.05 0.05 0.05 0.05 Mean Difference Df 4 4 4 4 T stat 6.52 1.328 1.013 0.15 Source: Computed. Result Jet Airways Comparing the calculated value of ‘t’(6.52) with table value of ‘t’ for degrees of freedom =(5-1)=4, and at 5% level of significance(2.77) two tail test, it is clear that the calculated value of ‘t’ is greater than that of the table. So the null hypothesis is rejected. It reveals that increase in income will result in increase in expenses

Spice Jet Comparing the calculated value of ‘t’(1.328) with table value of ‘t’ for degrees of freedom =(5-1)=4, and at 5% level of significance(2.77) two tail test, it is clear that the calculated value of ‘t’ is lesser than that of the table. So the null hypothesis is accepted. It reveals that decrease in income will result in decrease in expenses.

Kingfisher Airlines Comparing the calculated value of ‘t’(1.013) with table value of ‘t’ for degrees of freedom =(5-1)=4, and at 5% level of significance(2.77) two tail test, it is clear that the calculated value of ‘t’ is lesser than that of the table. So the null hypothesis is accepted. It reveals that decrease in income will result in decrease in expenses. International Journal of Management and Social Science Research Review, Vol.1, Issue.9, March- 2015. Page

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Jagson Airlines Comparing the calculated value of ‘t’(0.15) with table value of ‘t’ for degrees of freedom =(5-1)=4, and at 5% level of significance(2.77) two tail test, it is clear that the calculated value of ‘t’ is lesser than that of the table. So the null hypothesis is accepted. It reveals that decrease in income will result in decrease in expenses.

Co-efficient of Variation Compare the Performance of Private Airline companies by using statistical tool as co-efficient of variation is used.

The following table 4.14.1 gives the particulars of Private Airline companies Operating Profit during the period of 2008-2009 to 2012-2013.

Table- 2, Operating Profit of the Selected Private Airline Companies (Rs.In crores)

Year Jet Airways Spice Jet Kingfisher Jagson Airlines Airlines 2008-2009 601.82 3.16 553.20 0.68 2009-2010 2108.72 51.96 320.41 1.80 2010-2011 2514.79 429.73 944.04 3.93 2011-2012 1855.02 505.44 2158.40 13.12 2012-2013 902.93 598.36 2808.27 1.35 Mean 1596.66 317.74 1356.86 4.18 SD 812.85 272.08 1076.98 5.15 C.V 50.91 85.63 79.37 123.21 Among the four Private Airline companies, the Operating Profit of Jet Airways Limited is more consistent as the co-efficient of variation is less and also Jet Airways Limited is having better Operating Profit as the average is higher.

The following table 3 gives the particulars of Private Airline companies Interest Earned during the period of 2008-2009 to 2012-2013

Table - 3, Interest Earned by the Selected Private Airline Companies (Rs.In crores)

Year Jet Airways Spice Jet Kingfisher Jagson Airlines Airlines 2008-2009 1450.86 266.32 2029.33 2.03 2009-2010 1824.74 374.95 2245.59 1.70 2010-2011 1872.72 409.78 2340.32 1.62 2011-2012 2011.24 439.68 1276.34 0.68 2012-2013 1118.98 52.26 1436.15 0.01 Mean 1655.71 308.60 1865.55 1.208 SD 364.73 157.57 481.72 0.837 C.V 22.03 51.06 25.82 69.29 Among the four Private Airline companies, Interest Earned of Jet Airways Limited is more consistent as the co- efficient of variation is less. Kingfisher Airlines is having better Interest Earned as the average is higher. The following table 4 gives the particulars of Selected Private Airline companies Other Income Earned during the period of 2008-2009 to 2012-2013.

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Table - 4,Other Income Earned by the Selected Private Airline Companies (Rs.In crores)

Year Jet Spice Jet Kingfisher Jagson Airways Airlines Airlines 2008-2009 443.75 143.59 598.90 034 2009-2010 249.82 97.03 333.30 0.39 2010-2011 250.57 61.01 81.58 1.07 2011-2012 252.71 71.32 330.50 17.66 2012-2013 657.12 75.85 182.08 0.49 Mean 425.39 89.76 305.27 3.99 SD 177.12 32.83 195.48 7.65 C.V 41.64 36.58 64.04 191.73 Among the four Private Airline companies, the other income earned of Spice Jet Limited is more consistent as the co-efficient of variation is less. Jet Airways Limited is having better other income earned as the average is higher. The following table 5 gives the particulars of Private Airline companies Employee expenses during the period of 2008-2009 to 2012-2013.

Table – 5, Employee Expenses of the Selected Private Airline Companies (Rs.In crores)

Year Jet Airways Spice Jet Kingfisher Jagson Airlines Airlines 2008-2009 1410.50 134.87 825.42 3.35 2009-2010 1226.55 146.28 689.38 4.70 2010-2011 1342.19 168.39 680.54 3.84 2011-2012 1599.49 231.45 669.51 1.43 2012-2013 1544.24 402.87 349.16 0.62 Mean 1424.59 216.77 642.80 2.788 SD 150.93 110.53 175.98 1.705 C.V 10.59 50.99 27.38 61.15 Among the four Private Airline companies, the Employee expenses of Jet Airways Limited are more consistent as the co-efficient of variation is less. Jet Airways Limited is having better Employee expenses as the average is higher. The following table 6 gives the particulars of Private Airline companies other expenses like Raw Materials; Power & Fuel cost, Manufacturing expenses, Selling and Administration expenses, miscellaneous expenses during the period of 2008-2009 to 2012-2013.

Table -6, Other Expenses of the Selected Private Airline Companies (Rs.In crores)

Year Jet Airways Spice Jet Kingfisher Jagson Airlines Airlines 2008-2009 9558.82 1156.93 4996.95 4.54 2009-2010 7103.30 1595.13 4058.13 8.40 2010-2011 8925.54 1582.96 4608.80 9.81 2011-2012 11770.17 2142.62 6982.30 11.69 2012-2013 14405.42 4138.75 2960.49 0.73 Mean 10352.65 2123.28 4721.33 7.088 SD 2813.33 1179.75 1478.26 4.39 C.V 27.17 55.56 31.11 61.94

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Among the four Selected Private Airline companies, the other expenses of Jet Airways Limited are more consistent as the co-efficient of variation is less. Jet Airways Limited are having better Other expenses as the average is higher.

GROWTH RATE OF THE SELECTED PRIVATE AIRLINES IN INDIA The following table 7 highlights Operating Profit by the Private Airlines in India during the study period 2008- 2009 to 2012-2013.

Table - 7, Operating Profit of the Jet Airways Limited during the period from 2008-2009 to 2012-2013 (Rs.In crores) Jet Airways Spice Jet Kingfisher Airlines Jagson Airlines Year Amount G R Amount G R Amount G R Amount G R

2008-09 601.83 - 3.19 - 553.20 - 0.68 - 2009-10 2108.72 350.38 51.96 1628.84 320.41 57.92 1.80 264.71 2010-11 2514.79 119.26 429.73 827.04 944.04 294.63 3.93 218.33 2011-12 1855.02 73.76 505.44 117.62 2158.40 228.63 13.12 333.84 2012-13 902.93 48.67 598.36 118.38 2808.27 130.11 1.35 10.29 GR – Growth Rate The data presented in the Table 7 shows that the amount of Operating Profit of Jet Airways Limited was at Rs. 601.08 crores in 2008-2009 and it has increased to Rs. 902.93 during the period of 2012-2013 with growth rate of 48.67. Operating Profit of Spice Jet was at Rs. 3.19 crore in 2008-2009 and it has increased to Rs. 598.36 during the period of 2012-2013 with growth rate of 118.38. Operating Profit in Kingfisher Airlines Limited was at Rs. 553.20 crores in 2008-2009 and it has increased to Rs. 2808.27 during the period of 2012-2013 with growth rate of 130.11.

Table – 8, Interest Earned by the Spice Jet Limited during the period from 2008-2009 to 2012-2013 (Rs.In crores) Jet Airways Spice Jet Kingfisher Airlines Jagson Airlines Year Amount G R Amount G R Amount G R Amount G R

2008-09 1450.86 - 266.52 - 2029.33 - 2.03 - 2009-10 1824.74 125.77 374.95 59.12 2245.59 110.66 1.70 83.74

2010-11 1872.72 102.63 409.70 109.27 2340.32 104.22 1.62 95.29

2011-12 2011.24 107.40 439.68 107.32 1276.34 54.54 0.68 41.98

2012-13 1118.98 55.64 52.26 11.89 1436.15 112.52 0.01 1.47 The data presented in the Table 8 shows that the amount of Interest earned by the Jet Airways Limited was at Rs. 1450.86 crore in 2008-2009 and it has decreased to Rs. 1118.98 during the period of 2009-2010 with growth rate of 55.64. Interest earned by the Spice Jet Limited was at Rs. 266.52 crore in 2008-2009 and it has decreased to Rs. 52.26 during the period of 2012-2013 with growth rate of 11.89. Interest earned by the Kingfisher Airlines Limited was at Rs. 2029.33 crore in 2008-2009 and it has decreased to Rs. 1436 during the period of 2012-2013 with growth rate of 112.52. Interest earned by the Jagson Airlines Limited was at Rs. 2.03 crore in 2008-2009 and it has decreased to Rs. 0.01 during the period of 2012-2013 with growth rate of 1.47.

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Table – 9,Employee Expenses of the Jet Airways Limited during the period from 2008-2009 to 2012-2013 (Rs.In crores)

Jet Airways Spice Jet Kingfisher Jagson Airlines Airlines Year Amount G R Amount G R Amount G R Amount G R 2008-09 1410.50 - 134.87 - 825.42 - 3.35 - 2009-10 1226.55 86.96 146.28 108.46 689.38 83.52 4.70 140.30 2010-11 1342.19 109.43 168.39 115.11 680.54 98.72 3.84 81.70 2011-12 1599.49 119.17 231.45 137.45 669.51 98.38 1.43 37.24 2012-13 1544.24 96.55 402.87 174.06 349.16 52.15 0.62 43.36 The data presented in the Table 9 shows that the amount of Employee expenses of the Jet Airways Limited was at Rs. 1410.50 crore in 2008-2009 and it has increased to Rs. 1544.24 during the period of 2012-2013 with growth rate of 96.55. Employee expenses of the Spice Jet Limited was at Rs. 134.87 crore in 2008-2009 and it has increased to Rs. 402.87 during the period of 2012-2013 with growth rate of 174.06. Employee expenses of the Kingfisher Airlines Limited was at Rs. 825.42 crore in 2008-2009 and it has increased to Rs. 349.16 during the period of 2012-2013 with growth rate of 52.15. Employee expenses of the Jagson Airlines Limited was at Rs. 3.35 crore in 2008-2009 and it has increased to Rs. 0.62 during the period of 2012-2013 with growth rate of 43.36

Table -10,Other Expenses of the Jet Airways during the period 2008-09 to 2012-13 (Rs.In crores)

Jet Airways Spice Jet Kingfisher Airlines Jagson Airlines Year Amount G R Amount G R Amount G R Amount G R 2008-09 9558.82 - 1156.93 - 4996.95 - 4.54 - 2009-10 7103.30 74.31 1595.13 137.88 4058.13 81.21 8.40 185.02 2010-11 8925.54 125.6 1582.96 99.24 4608.80 113.57 9.81 116.79 2011-12 11770.1 131.8 2142.62 135.36 6982.30 151.50 11.69 119.16 2012-13 14405.4 122.3 4138.75 193.16 2960.49 42.40 0.73 8.36 Table 10 shows that the amount of other expenses of the Jet Airways Limited was at Rs. 9558.82 crore in 2008- 2009 and it has increased to Rs. 14405.42 during the period of 2012-2013 with growth rate of 122.39. Other expenses of the Spice Jet Limited was at Rs. 1156.93 crore in 2008-2009 and it has increased to Rs. 4138.75 during the period of 2012-2013 with growth rate of 193.16. Other expenses of the Kingfisher Airlines Limited was at Rs.4996.95 crore in 2008-2009 and it has increased to Rs. 2960.49 during the period of 2012-2013 with growth rate of 42.40. Other expenses of the Jagson Airlines Limited was at Rs. 4.54 crore in 2008-2009 and it has increased to Rs. 0.73 during the period of 2012-2013 with growth rate of 8.36.

CORRELATION Correlation is a statistical measure that indicates the extent to which two or more variables fluctuate together. A positive correlation indicates the extent to which those variables increase or decrease in parallel; a negative correlation indicates the extent to which one variable increases as the other decreases.

CORRELATION ANALYSIS Ho: There is no significant relationship between Income and Expenses of Selected Private Airline companies. Ho: There is no significant relationship between other income and interest earned of Selected Private Airline companies.

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Ho: There is no significant relationship between Employee Expenses and Other Expenses of Selected Private Airline companies. Table -11, Correlation Income and Other Income and Employee Expenses and COMPANY NAME Expenses Interest Earned Other Expenses JET AIRWAYS +0.974 -0.9764 -0.9764 SPICE JET +0.925 -0.1718 -0.1718 KINGFISHER AIRLINES +0..765 -0.025 -0.025 JAGSON AIRLINES +0.897 -0.3515 -0.3515

CONCLUSION The Indian Aviation Sector has witnessed tremendous growth in the recent past which is driven by sound demographic, macroeconomic, government aided reforms & market dynamics. Almost 35 % of exports from India & 97% foreign tourists to India arrive by Air each year. Aviation sector has undergone a major facelift in past 5-6 years.

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ANNUAL REPORT  Annual Report of Jet Airways Limited (2008-2009 to 2012-2013)  Annual Report of Spice Jet Limited (2008-2009 to 2012-2013)  Annual Report of Kingfisher Airlines Limited (2008-2009 to 2012-2013)  Annual Report of Jag son Airlines Limited (2008-2009 to 2012-2013)

WEBSITES  www.Jetairways.com  www.Moneycontrol.com  www.Kingfisher Airlines.com  www.BSEIndia.com  www.Operating performance of Airlines in India.com  www.Capitalmarket.com  www.Jagson airlines.com  www.Spice Jet .com

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